What are the key considerations when setting up a family office in the UAE?
Are you considering establishing a family office in the United Arab Emirates (UAE)? Here are some crucial factors to bear in mind as you embark on this journey, outlined by Leevyn Isabel, Business Development Director:
1. Choosing the right jurisdiction
Selecting the appropriate jurisdiction is paramount. The UAE offers diverse options, including the Dubai International Financial Centre (DIFC), Dubai Multi Commodities Centre (DMCC), and Abu Dhabi Global Market (ADGM). Each comes with its own pros and cons, so careful analysis is imperative.
2. The family business register
Registering your family business on the Family Business Register brings it under the purview of the Family Businesses Law. This dedicated legal framework addresses key aspects like succession planning, dispute resolution, and safeguarding minority shareholders.
3. Navigating tax implications
The taxation landscape is pivotal. The introduction of a 9% corporate tax in the UAE requires meticulous consideration, potentially impacting your family office's financial planning.
4. Navigating regulatory demands
Compliance with regulatory norms is imperative. The UAE houses diverse regulatory authorities overseeing family offices. Ensuring your family office adheres to all relevant regulations is essential for seamless operations.
5. Financial outlay
The cost of setting up and maintaining your family office varies based on its complexity, size, and chosen jurisdiction. A clear understanding of the potential expenses helps in informed decision-making.
6. Professional guidance is key
To navigate the legal and financial intricacies of establishing a family office, enlist the expertise of qualified lawyers and financial advisors. Their guidance ensures alignment with legal norms and your family's specific requirements.
7. Full-fledged vs. virtual family office
Deciding between a full-fledged or virtual family office depends on your preferences and objectives. Evaluating the pros and cons of each approach will help you make an informed decision.
8. Complementary holding entities & foundations
The consideration of incorporating holding entities and foundations can enhance your family office's effectiveness and can provide a more robust structure for managing assets.
9. Family members & asset locations
Factor in the geographical location of both family members and assets. This will influence decisions about where to establish your family office and how to manage its operations efficiently.
How can Ocorian help?
Our primary focus in the Middle East is working with families, assisting them in setting up and supporting family offices, and structuring their wealth. We also collaborate with managers, including those based in Europe and the US, who are seeking investors. This link is important as it involves professionalising the family office and aligning with the requirements of international co-investors or managers.